An industry body has told farmers that the Office of Budget Responsibility's (OBR) own figures on the impact of the inheritance tax changes are 'highly uncertain'.
It comes as government ministers keep stressing how their figures for the inheritance tax changes proposed in the budget are certified by the OBR.
However, speaking at the recent Oxford Farming Conference, the Central Association of Agricultural Valuers (CAAV) said that 'simply isn’t the case'.
The body noted that the OBR only certified the costings as 'highly uncertain' and 'unlikely to reach a steady state for at least 20 years'.
“The OBR has not given the government the confidence it claims for the figures it uses,” said Jeremy Moody, secretary of the CAAV, who spoke at the conference.
He added: “Instead, the OBR’s report repeatedly says that the financial figures are highly uncertain, and it does not even touch the question of how many taxpayers are affected.”
The government consistently refers to only 500 farmers being affected by the controversial inheritance tax changes.
In the pre-Christmas meeting of the House of Commons Liaison Committee, the EFRA committee chairman, Alistair Carmichael directly asked the prime minister if he thought that the official figure of 500 was a 'robust figure'.
Sir Keir Starmer replied: “That is a robust figure. It was published by the Treasury, certified by the OBR.”
However, the OBR gave no figure for the number affected in its paper published by it and the Treasury with the budget papers and giving its assessment of the budget measures. “It does not appear to be an OBR figure,” said Mr Moody.
“The government still clings to figures that the OBR has told it are 'among the most uncertain in the policy package' when everybody else is telling them how much damage the proposals would do.
"The OBR report is not a defence; it is a certificate of uncertainty," Mr Moody told delegates at the conference.
The CAAV has already calculated that the government is underestimating the number of affected farmers by a factor of five, with inflation bringing yet more over the tax threshold within the next generation.
One of the reasons for this is the government’s failure to consider farming tax claims made solely under business property relief (BPR) as well as those under agricultural property relief (APR).
"Where does the figure of 500 farmers come from? It seems to be first stated in the Treasury paper, Summary of Reforms to APR and BPR, issued with the budget,” said Mr Moody.
“Here it offers 500 as the number of those affected by the changes who claim APR; a relief on land and buildings, not on operational farming assets which benefit from BPR.”
This is an HMRC figure, not an OBR one. “HMRC may have answered the Treasury’s APR question but that does not give the full picture of who is affected by the tax changes, as it completely ignores those claiming BPR alone,” said Mr Moody.
“Strictly, the official paperwork has never said that it did, whatever Ministers have then said.”
The OBR predicted the tax take from the IHT changes would be £521m by 2030. “[But] both the static and behavioural elements of these costings are uncertain,” said the report.
“We assign an uncertainty rating to all certified policy costings.”
